CBN: FX sales hit $654m in Dec as inflows rise by 38%

Foreign exchange (FX) inflows rebounded sharply in December as the central bank stepped up dollar sales to support market liquidity, even as offshore investor participation remained subdued towards the end of 2025, data from FMDQ revealed at the weekend.

The data revealed that total FX inflows into the FX market rose 38 per cent month-on-month (m/m) to $2.8 billion in December. The increase marked a recovery from a deeper 67 per cent contraction recorded in November, though December’s inflow still ranked as the second-weakest level of FX supply over the past 16 months, underscoring persistent pressure in the market.

Also, the rebound was driven largely by the Central Bank of Nigeria’s (CBN) increased intervention. FX sales by the apex bank climbed to $654 million in December, more than double the prior month’s level of N318 million, highlighting the bank’s active role in bolstering liquidity amid thin offshore inflows.

CBN intervention offset weakness in some domestic segments. FX inflows from domestic corporates declined by 5 per cent m/m to $420 million, the only segment to record a contraction during the period. All other sources posted gains, reflecting a broad-based, albeit fragile, improvement in supply conditions.

Foreign portfolio inflows (FPIs) rose modestly by 7 per cent m/m to $632 million in December. While positive, the increase marked a sharp slowdown compared with the $3.5 billion recorded in October, as global investors pared risk exposure toward the end of the year.

Market participants attributed the softer inflows to typical year-end dynamics, when foreign investors reduce deployable liquidity, lock in profits, and rebalance portfolios.

Despite the slowdown, analysts expect foreign participation to improve in the coming months, supported by Nigeria’s relatively high yields and the re-emergence of carry trade opportunities as policy uncertainty eases.

Furthermore, foreign direct investment (FDI), the smallest component of foreign inflows, more than doubled to $50.1 million in December from $10.4 million in November, albeit from a low base, signaling tentative but still limited long-term capital commitment.

Domestic sources also played a notable role in the month-on-month rebound. FX inflows from exporters and importers increased by 49 per cent to $683 million, while contributions from individuals surged 88 per cent to $275.3 million, reflecting improved participation across non-offshore segments of the market.

Commenting on the development, analysts at FBNQuest Merchant Bank, said that softer inflation expectations should allow for a more accommodative policy stance in 2026.

“Despite this shift, we expect offshore participation to remain steady, supported by the MPC’s gradual easing path and the relative attractiveness of Nigerian yields. Additionally, Nigeria’s investment appeal could be further supported by the Fed’s dovish policy stance in 2026, which could support an improvement in global investor risk appetite and encourage stronger foreign capital inflows into emerging markets”, the bank said.

For now, however, December’s data suggest the FX market remains heavily reliant on central bank intervention, even as broader inflows show early signs of stabilization.